Energy Giant Mirant Fights County’s CO2 Tax

(CN) – Energy giant Mirant Mid-Atlantic claims a Maryland county unfairly singled it out for a carbon dioxide emissions tax, from which the county hopes to make $15 million a year. Mirant claims the tax of $5 per ton “on all of Mirant’s carbon dioxide emissions in the county” will apply only to Mirant, as it’s the only company that emits more than 1 million tons of CO2 a year in Montgomery County.

Mirant, in its complaint in Baltimore Federal Court, claims that the tax or fee, which was signed into law May 28, will affect only companies that emit 1 million tons of CO2 in the county per year, which makes Mirant the county’s only “major emitter.” “The effect of the Emissions Legislation is to impermissibly single out and assess a fee against Mirant on all of its carbon dioxide emissions in the County while no other entity is assessed a fee on any emissions,” Mirant says.Mirant claims the county wrote the law to “establish a reliable funding source for greenhouse gas reduction programs,'” after Maryland entered into the “Regional Greenhouse Gas Initiative” (RGGI), in which 10 states are trying to reduce emissions of greenhouse gases.Mirant says it sells its power to PJM Interconnection, “a regional transmission organization that coordinates the movement and sale of wholesale electricity in all or parts of 13 states and the District of Columbia.” It claims the emissions fees “will cause power generation from Montgomery County to shift to out-of-state generators that are less efficient and that are not subject to pollution control requirements as stringent as Maryland’s,” therefore actually increasing environmental pollutants. County officials have promised that alongside the $15 million it plans to take from Mirant, local ratepayers will not see an increase in electric rates, because “Mirant does not have enough ‘market power’ to raise the price of power unilaterally,” according to the complaint. Mirant claims that PJM ultimately will be forced to “dispatch electricity from generators that have higher prices than would have been charged by the Dickerson Plant.” And since power generators must purchase and can buy, sell and trade emission allowances, Mirant says it will not reap benefits from any of the RGGI plans to offset an increase in emissions costs for generators, which is unfair. Mirant says the tax will force its “cost per ton of carbon dioxide emitted at the Dickerson Plant to be multiples of that incurred by its competitors.” The law makes failure to pay the emissions fee “a Class A criminal violation,” Mirant says. It adds: “There is no rational basis for assessing the Emissions Fee on 100 percent of Mirant’s carbon dioxide emissions in the county, starting with the first ton of emissions, while exempting the emissions generated by all other entities in the county, including the county itself.”Mirant demands an injunction and a declaration that the emissions legislation is excessive, unconstitutional and discriminatory.Its lead counsel is Lewis Wiener with Sutherland Asbill & Brennan of Washington, D.C.